Foreign Affairs minister Hector Lacognata said he had received comments and seen some cuttings with the alleged statements from Serra in São Paulo during a meeting with business people, but for the Paraguayan government “they are what they are, campaign speeches.”
“In electoral campaigns candidates try those speeches and reactions which most votes and public opinion attract, and obviously that is the path Mr Serra has chosen,” underlined the head of Paraguayan diplomacy.
Brazil opposition main presidential candidate said that Brazil “is doing philanthropy with Paraguay and Bolivia” in reference to the benefits extended to Paraguay regarding the shared Itaipu hydroelectric dam and the problems faced by Brazilian companies in Bolivia with the nationalization process.
However Lacognata said that the administration of President Fernando Lugo “is closely following the timetable agreed with President Lula da Silva referred to Itaipu.”
The benefits agreed with Brazil regarding Itaipu, which was one of the main points of President Lugo’s campaign promises (‘recovering our energy sovereignty’) will be reviewed Friday during the brief visit of president Lula.
The main ceremony of the bilateral summit will take place 60 kilometers from the capital Asunción where the two presidents will put the founding stone for the works on a 500 KW power grid linking the world’s largest operational hydroelectric dam with Asunción.
This should help end blackouts and brownouts in Paraguay’s capital but there are still some questions about the financing of the US$ 300 million investment needed for such an undertaking.
This is part of a bilateral agreement reached by both leaders July 25, 2009 in Asunción, by which Brazil agreed to extend Paraguay greater benefits from the shared Itaipu.
However some of the points are still pending congressional agreement in Brazil, which is in the midst of a presidential campaign and makes it difficult to establish a date.
Among the pending benefits are trebling the payment Paraguay receives for the surplus power absorbed by Brazil, from US$ 120 million to US$ 360 million.
Theoretically power is distributed 50/50 but since Paraguay has more than enough with 5% of Itaipu under contract conditions dating back to the seventies, the rest can only be sold to partner Brazil, at rates of four decades ago.
Precisely the agreement also contemplates that Paraguay can gradually have access with the extra power to the Brazilian energy spot market, hopefully collecting better prices.
However São Paulo, the main beneficiary of the cheap energy and its strong manufacturing lobby has campaigned strongly against those terms of the agreement, which Lula promised to Paraguay, but has no certainty in achieving the necessary votes in Congress.
Brazilian industry and the energy sector have also complained bitterly that president Lula has been too lenient with Bolivia’s Evo Morales and his policy of taking over energy and other “strategic” industries, many of them belonging to Brazilians.
Therefore no wonder that the former governor of São Paulo and former mayor of the São Paulo megalopolis and now presidential hopeful José Serra brought up the issue precisely before the business community of Brazil’s power house.
Lula has argued that Brazil as the rich brother has “to give a hand” to its poor neighbors, not only out of compassion but also strategically.